GULLIXSON: 5 myths about Sonoma Clean Power

May 27, 2013, 3:52PM

05/27/2013

Last week, Gov. Jerry Brown encouraged UC Berkeley graduates to go out and confront the greatest threat to their future, a threat bigger, he said, than the home mortgage crisis and student loan debt.

"All of these problems are serious," Brown said. But students face something "even more threatening," he said. That is the buildup of greenhouse gases.

"That's the world you face," said Brown, in noting that politicians have been slow to respond to climate change. "But you have the skills and the knowledge and the sense of the good. You can make change."

In addressing the Santa Rosa City Council on Tuesday, Sonoma County Supervisor Shirlee Zane made a similar appeal. She pointed to a number of "worldwide catastrophic events" including last week's tornado in Oklahoma as an example of why cities should join the Sonoma Clean Power authority, thus giving consumers the option of getting power from a supplier other than PG&amp;E.

<NO1><NO>"All change occurs locally," she said. "Now is the time to exercise leadership. The stakes are too high."

But is Sonoma Clean Power really all about confronting climate change?

That's debatable. One of the biggest misconceptions of Sonoma Clean Power is that "renewable" and "clean" is the same thing as "greenhouse gas-free." It's not. "Renewable" in this arena is a political term, not a scientific one.

For example, there's no arguing that large hydroelectric dams are far superior to coal plants in terms of their impact on the climate. Hydroelectric dams emit virtually no greenhouse gas, whereas coal plants are the worst of the worst. But in terms of California's legal definition of "renewable" there is no distinction. Large hydroelectric plants, even ones that have existed for years, and coal plants are both considered dirty.

(There's also the argument that if California was truly focused on reducing the state's carbon footprint it would count nuclear power — which makes up nearly 24 percent of PG&amp;E's energy supply — as a "renewable" source of power. But that's even less of a political possibility.)

<NO1>Last week, Oregon approved a signature-gathering campaign for ballot initiative that would require all hydroelectric power be counted toward renewable energy requirements. Voters there could be seeing this on the November 2014 ballot. Meanwhile, efforts have been made in the California Legislature to change these definitions as well, but so far none has been successful.

<NO>This is all relevant because the chief sales pitch that's being made about Sonoma Clean Power is that it would provide at least 33 percent "renewable" energy whereas PG&amp;E now provides less than 20 percent. That's true under the current narrow definitions. But if you went by a definition of "low-carbon" or "greenhouse-gas-free," PG&amp;E's current supply would be roughly 62 percent.

What would Sonoma Clean Power's be? We don't know as yet because the public hasn't been told where those companies seeking to operate the local system plan to get their renewable energy and what would make up the county's portfolio. Some of this still needs to be negotiated with the county.

But what's anticipated is that a good portion of the renewable power, at least from the outset, would come from renewable energy credits. These essentially are pieces of paper that certify that someone, somewhere created a certain amount of electricity from accepted renewable sources — i.e. solar, wind, small hydroelectric, etc. <NO1><NO>

Credits themselves aren't bad. They encourage the development of renewable sources of energy, even if they're not in this area. PG&amp;E counts on a certain amount of renewable energy credits in its portfolio as well.

Still, it seems if California was really focused on combating climate change it would be more interested in counting real power from a carbon-free dam than theoretical power from a piece of paper.

<NO1><NO>What defines "renewable" is one of five major myths and misconceptions I'm hearing about Sonoma Clean Power. Here are the other four.

2. Sonoma Clean Power will replace PG&amp;E: On the contrary, this new power agency would merely be buying power for those who choose to be its customers. PG&amp;E would continue to handle billing, transmission, metering, customer service, repairs and all other key functions. Meanwhile, PG&amp;E also would remain a competitor. In fact, it's the sleeping giant in all of this. The public utility is being forced by legislative mandates and market conditions to come up with its own "green energy" option, which is expected to be rolled out early next year.

At that point, if Sonoma Clean Power moves forward, consumers would likely have not just two options but at least four. They could stay with Sonoma Clean Power's basic rate (the default) or opt for its 100 percent-renewable package. (Marin Clean Energy, on which Sonoma County's system is largely modeled, calls these options Light Green and Deep Green.) Or consumers could opt out and go with PG&amp;E's basic rates or pay a little more and go with its "green energy" option.

All of this is positive in that it would give consumers choices while pressuring suppliers to look for cleaner sources of energy. But it's a stretch to suggest, as the county is anticipating, that only 20 percent of local consumers would opt out and stay with PG&amp;E. It's anybody's guess what that percentage will be. So much will depend on what the rates look like and which packages are most attractive in terms of rates and carbon footprint.

3. Sonoma Clean Power poses a huge financial risk to cities and a county that can't even fix its potholes: It's true that Sonoma County can't afford to fix all of its potholes. But that would still be the case regardless of what happens. Potholes and power are apples and oranges. The $1 million or so the county has invested so far in the system would be at risk if Sonoma Clean Power was killed right now. But if this all moves forward as expected, those costs are expected to be made up through Sonoma Clean Power revenues, which are projected to be roughly $170 million a year. Even in a worst-case scenario, if the system fails, consumers would be switched back to PG&amp;E and losses would be covered by a bond that would be posted and supported by revenues.

The bottom line is that none of the costs to operate Sonoma Clean Power would come from taxpayers. And the general funds of the county and member cities do not appear to be at any risk.

4. This needs to be done in a hurry: One could certainly get that impression with the urgency the county is putting on this. The Board of Supervisors approved this system on April 23 and has given cities only until June 30 to get on board or be left behind in terms of decision making. But there is no real magic to this date. This is essentially the timeline that was developed as part of the process to find an operator for the system. County officials say they need the cities to commit by then in order to complete negotiations to ensure the company is running by Jan. 1, 2014. But there's no magic to that date either. The only real urgency officials have indicated is that they want to take advantage of low interest rates and low rates for natural gas, which is expected to be a key part of the county's renewable portfolio.

But given that only one city — Windsor — so far has committed to join the authority, the county should get the hint that they may be rushing things a bit.

5. Sonoma County environmentalists are all in agreement about this: In fact, environmentalists are all over the map. As Staff Writer Brett Wilkison pointed out in his report earlier this month ("Sonoma County power agency plan scrambles political allegiances," May 10) while many locals are supportive of the idea of encouraging the development of local green energy systems, some environmentalists are concerned about where they would be built. They're worried this could put at risk open space and/or ag lands which they've fought hard to protect over the years.

This is not to suggest that these myths, misconceptions and unknowns are justification for pulling the plug on Sonoma Clean Power. This is just to underscore some of the realities that are part of this debate and the change that's ahead. In observing all of these discussions, it seems to me that the biggest risk to the future of Sonoma Clean Power is not in selling it to Sonoma County cities and residents. It's in overselling it.

Last week, Gov. Jerry Brown encouraged UC Berkeley graduates to go out and confront the greatest threat to their future, a threat bigger, he said, than the home mortgage crisis and student loan debt.

"All of these problems are serious," Brown said. But students face something "even more threatening," he said. That is the buildup of greenhouse gases.

"That's the world you face," said Brown, in noting that politicians have been slow to respond to climate change. "But you have the skills and the knowledge and the sense of the good. You can make change."

In addressing the Santa Rosa City Council on Tuesday, Sonoma County Supervisor Shirlee Zane made a similar appeal. She pointed to a number of "worldwide catastrophic events" including last week's tornado in Oklahoma as an example of why cities should join the Sonoma Clean Power authority, thus giving consumers the option of getting power from a supplier other than PG&amp;E.

<NO1><NO>"All change occurs locally," she said. "Now is the time to exercise leadership. The stakes are too high."

But is Sonoma Clean Power really all about confronting climate change?

That's debatable. One of the biggest misconceptions of Sonoma Clean Power is that "renewable" and "clean" is the same thing as "greenhouse gas-free." It's not. "Renewable" in this arena is a political term, not a scientific one.

For example, there's no arguing that large hydroelectric dams are far superior to coal plants in terms of their impact on the climate. Hydroelectric dams emit virtually no greenhouse gas, whereas coal plants are the worst of the worst. But in terms of California's legal definition of "renewable" there is no distinction. Large hydroelectric plants, even ones that have existed for years, and coal plants are both considered dirty.

(There's also the argument that if California was truly focused on reducing the state's carbon footprint it would count nuclear power — which makes up nearly 24 percent of PG&amp;E's energy supply — as a "renewable" source of power. But that's even less of a political possibility.)

<NO1>Last week, Oregon approved a signature-gathering campaign for ballot initiative that would require all hydroelectric power be counted toward renewable energy requirements. Voters there could be seeing this on the November 2014 ballot. Meanwhile, efforts have been made in the California Legislature to change these definitions as well, but so far none has been successful.

<NO>This is all relevant because the chief sales pitch that's being made about Sonoma Clean Power is that it would provide at least 33 percent "renewable" energy whereas PG&amp;E now provides less than 20 percent. That's true under the current narrow definitions. But if you went by a definition of "low-carbon" or "greenhouse-gas-free," PG&amp;E's current supply would be roughly 62 percent.

What would Sonoma Clean Power's be? We don't know as yet because the public hasn't been told where those companies seeking to operate the local system plan to get their renewable energy and what would make up the county's portfolio. Some of this still needs to be negotiated with the county.

But what's anticipated is that a good portion of the renewable power, at least from the outset, would come from renewable energy credits. These essentially are pieces of paper that certify that someone, somewhere created a certain amount of electricity from accepted renewable sources — i.e. solar, wind, small hydroelectric, etc. <NO1><NO>

Credits themselves aren't bad. They encourage the development of renewable sources of energy, even if they're not in this area. PG&amp;E counts on a certain amount of renewable energy credits in its portfolio as well.

Still, it seems if California was really focused on combating climate change it would be more interested in counting real power from a carbon-free dam than theoretical power from a piece of paper.

<NO1><NO>What defines "renewable" is one of five major myths and misconceptions I'm hearing about Sonoma Clean Power. Here are the other four.

2. Sonoma Clean Power will replace PG&amp;E: On the contrary, this new power agency would merely be buying power for those who choose to be its customers. PG&amp;E would continue to handle billing, transmission, metering, customer service, repairs and all other key functions. Meanwhile, PG&amp;E also would remain a competitor. In fact, it's the sleeping giant in all of this. The public utility is being forced by legislative mandates and market conditions to come up with its own "green energy" option, which is expected to be rolled out early next year.

At that point, if Sonoma Clean Power moves forward, consumers would likely have not just two options but at least four. They could stay with Sonoma Clean Power's basic rate (the default) or opt for its 100 percent-renewable package. (Marin Clean Energy, on which Sonoma County's system is largely modeled, calls these options Light Green and Deep Green.) Or consumers could opt out and go with PG&amp;E's basic rates or pay a little more and go with its "green energy" option.

All of this is positive in that it would give consumers choices while pressuring suppliers to look for cleaner sources of energy. But it's a stretch to suggest, as the county is anticipating, that only 20 percent of local consumers would opt out and stay with PG&amp;E. It's anybody's guess what that percentage will be. So much will depend on what the rates look like and which packages are most attractive in terms of rates and carbon footprint.

3. Sonoma Clean Power poses a huge financial risk to cities and a county that can't even fix its potholes: It's true that Sonoma County can't afford to fix all of its potholes. But that would still be the case regardless of what happens. Potholes and power are apples and oranges. The $1 million or so the county has invested so far in the system would be at risk if Sonoma Clean Power was killed right now. But if this all moves forward as expected, those costs are expected to be made up through Sonoma Clean Power revenues, which are projected to be roughly $170 million a year. Even in a worst-case scenario, if the system fails, consumers would be switched back to PG&amp;E and losses would be covered by a bond that would be posted and supported by revenues.

The bottom line is that none of the costs to operate Sonoma Clean Power would come from taxpayers. And the general funds of the county and member cities do not appear to be at any risk.

4. This needs to be done in a hurry: One could certainly get that impression with the urgency the county is putting on this. The Board of Supervisors approved this system on April 23 and has given cities only until June 30 to get on board or be left behind in terms of decision making. But there is no real magic to this date. This is essentially the timeline that was developed as part of the process to find an operator for the system. County officials say they need the cities to commit by then in order to complete negotiations to ensure the company is running by Jan. 1, 2014. But there's no magic to that date either. The only real urgency officials have indicated is that they want to take advantage of low interest rates and low rates for natural gas, which is expected to be a key part of the county's renewable portfolio.

But given that only one city — Windsor — so far has committed to join the authority, the county should get the hint that they may be rushing things a bit.

5. Sonoma County environmentalists are all in agreement about this: In fact, environmentalists are all over the map. As Staff Writer Brett Wilkison pointed out in his report earlier this month ("Sonoma County power agency plan scrambles political allegiances," May 10) while many locals are supportive of the idea of encouraging the development of local green energy systems, some environmentalists are concerned about where they would be built. They're worried this could put at risk open space and/or ag lands which they've fought hard to protect over the years.

This is not to suggest that these myths, misconceptions and unknowns are justification for pulling the plug on Sonoma Clean Power. This is just to underscore some of the realities that are part of this debate and the change that's ahead. In observing all of these discussions, it seems to me that the biggest risk to the future of Sonoma Clean Power is not in selling it to Sonoma County cities and residents. It's in overselling it.